Business

Why rupee tanked to historic low?

Published

2 years ago

Farwa

The Pakistani rupee lost over Rs14, or 5%, against the US dollar in the outgoing week as the cash-strapped economy spirals deeper into a financial crisis amid challenges like looming debt default, shortage of dollars, unsustainable spending, uncontrolled inflation, and nine-year low foreign reserves.

Earlier during the week, the local unit advanced from a record low as the International Monetary Fund (IMF) team began negotiations with Pakistan over the resumption of its $6.5 billion bailout programme; however, Prime Minister Shehbaz Sharif’s rather concerning comments regarding the ongoing parleys sent the currency market reeling.

The PM on Friday said the Fund review mission was giving Finance Minister Ishaq Dar and his team a “very tough time” in the talks — expected to conclude on February 9.

Following his comments, the market panicked and the rupee devalued by 1.89% (or Rs5.22) to a new all-time low of Rs276.58 against the US dollar on Friday compared to Thursday’s close of Rs271.38.

Cumulatively, the rupee slumped 3.14% (or Rs8.69) in three days, compared to Wednesday’s close of Rs267.89 — the rupee recovered as crucial talks with the Washington-based lender resumed.

Tresmark, in its weekly currency commentary, noted that the rupee fell sharply last week from 264 per dollar to 278.50.

“It seemed to have stabilised around the 270 level, until the prime minister and finance minister spoke out,” the financial terminal for real-time market rates, news, charts, financial data, and technical analysis stated.

It added that when PM Shehbaz said that the IMF was imposing harsh conditions and when the finance czar said they were looking for philanthropists for billions of dollars, “traders assumed that the leadership was still looking for avenues other than IMF or that they would waste more time in negotiating with them.”

“However, in our assessment, the premier may have been only trying to prepare other stakeholders and vote base for harsh steps and measures,” Tresmark said, adding that another important factor behind the rupee’s downfall was the steep decline in total reserves of the country which are now at $8.7 billion (down by $712 million).

PM Shehbaz is battling to keep the economy afloat amid dollar shortages, and political tensions deepen.

Pakistan — with a $350 billion economy — is seeking a crucial instalment of $1.1 billion from the lender of the last resort to avoid default.

Tresmark mentioned that until and unless traders don’t feel confident about things getting better, especially the situation of reserves, the rupee would continue to fall, irrespective of its level.

“Traders we spoke to think the first and second level of resistance of 280 per dollar and 285 per dollar will be breached in the coming week unless the IMF comes on board. They also feel that 270-275 per dollar is the fair level post-IMF agreement, and any outruns will be temporary and will get corrected once there is some visibility of inflow,” the commentary read.

Business

FBR to Enhance Revenues: Enacts Significant Reforms, Attains Record Revenue Collection

Published

18 hours ago

Farwa

The Federal Board of Revenue has effectively executed significant reforms in the past year, enhancing tax administration, compliance, and digital transformation under the leadership of Prime Minister Shehbaz Sharif.
The FBR implemented AI-driven risk identification algorithms to improve tax audits and introduced a customer relationship management dashboard for real-time compliance monitoring.
Moreover, AI-driven Customs Intelligence and digital invoicing systems have transformed tax collection and customs operations.
The implementation of faceless customs assessment has markedly diminished clearance waits, optimizing international trade.
The unified sales tax return has streamlined the tax filing procedure, while the continuous advancement of a tier-3 data center seeks to enhance data security and AI-driven surveillance.
To enhance transparency, the FBR digitized its litigation management system for faster dispute resolution.

Business

Bilal Bin Saqib designated as main advisor to the Pakistan Crypto Council

Published

18 hours ago

Farwa

The government has designated Bilal Bin Saqib MBE as the Chief Adviser to the Finance Minister on the Pakistan Crypto Council to reinforce Pakistan’s dedication to technological advancement while implementing effective policy measures that bolster the national economy, facilitate digital transformation, and ensure a secure, transparent financial system for all.

A press release from the finance ministry on Wednesday states that Bilal Bin Saqib, acknowledged by Forbes, is a Web3 investor, strategic advisor, and thought leader in the blockchain sector.

Saqib was featured in Forbes’ 30 Under 30 list and has received recognition from King Charles III, the late Queen Elizabeth II, and the Mayor of London for his contributions to the community.

He received the 1632nd Points of Light Award, conferred by the British Prime Minister to acknowledge change-makers in the nation. He was awarded the MBE (Member of the British Empire) in 2023 for his contributions to the National Health Service in the UK.

In this pivotal role as the Chief Adviser to the Finance Minister on the Pakistan Crypto Council, Saqib will lend his great knowledge and experience to Pakistan’s efforts to integrate cryptocurrency and blockchain technologies into its financial ecosystem while ensuring the development of a robust regulatory framework for digital assets in alignment with global best practices.

Furthermore, he will counsel the Finance Ministry on investigating the application of artificial intelligence (AI) to improve governmental efficiency, refine decision-making processes, and foster innovation in public sector operations.

Saqib’s nomination signifies a pivotal advancement in Pakistan’s dedication to harnessing the revolutionary capabilities of digital currencies, safeguarding financial security, alleviating risks, and accurately evaluating the influence of cryptocurrencies on the nation’s economy.

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb endorsed the appointment of Bilal Bin Saqib, emphasizing the significant impact his extensive expertise and innovative vision are expected to have on shaping Pakistan’s stance in the swiftly advancing digital economy.

Business

Cooking oil prices climb with the onset of Ramadan.

Published

18 hours ago

Farwa

Edible oils, such as cooking and mustard oils, experienced a significant price increase, with the price of open edible oil escalating from Rs480 to Rs500 per litre.

A local merchant reported, “Mustard oil has risen in price by Rs20 per litre, now costing Rs520.”

Different brands of cooking oil were noted to be priced variably in Karachi’s markets, indicative of the prevailing inflationary trend in food products.

The escalation in edible oil prices corresponded with the surging costs of fruits, prompting consumer apprehension around heightened expenditures during Ramadan.